Question

Which of the statements regarding the standard deduction, if any, is correct?

a. Some taxpayers may qualify for two types of standard deductions.
b. The standard deduction is not available to taxpayers who are dependents.
c. The standard deduction may be taken as a for AGI deduction.
d. The basic standard deduction is indexed for inflation but the additional standard deduction is not.
e. None of these.

Answer 1

The basic standard deduction is adjusted for inflation, but the additional standard deduction is not, which maintains the tax bracket positions in relation to inflation.

Step-by-step explanation:

The correct statement regarding the standard deduction is that the basic standard deduction is indexed for inflation, but the additional standard deduction is not. This means as general prices rise, the basic amount of the standard deduction increases to keep pace with inflation, helping to prevent taxpayers from being pushed into higher tax brackets due to inflationary adjustments in their income. However, the additional standard deductions, which are the extra amounts that certain taxpayers qualify for, such as the elderly or blind, do not automatically adjust with inflation.